UK merchants from high-risk enterprises such as gaming, travel, casinos, adult entertainment providers, and pharmacies can now breathe a sigh of relief. Specialized financial institutions and credit card processors are now welcoming the idea of approving high-risk online merchant account UK. Many providers are now willing to offer these hard-to-place businesses high-risk merchant accounts since they better understand these high-risk sectors.
High-Risk Online Merchant Account UK Decoded
There are a few main reasons your business should select a high-risk online merchant account UK. Suppose your company operates in an industry considered a higher risk? What if you process high volumes of credit card sales beyond your approved limit? What if the Ultimate Beneficial Owner (UBO) has a poor credit score? What if your business is simply unable to manage the high chargeback ratios associated with your business type and processing history? If any of these scenarios apply to you, a high-risk merchant account may be needed to start accepting credit card payments.
In either case, your business will initially pay higher processing fees compared to others viewed as safer business types and those more of a sure bet by financial institutions. The good news is that if you shop around and compare merchant services, you can still have an opportunity to get a high-risk online merchant account UK with acceptable fees.
High-risk processors and acquiring banks tend to accept the increased liability associated with business types labeled as high risk. This, in turn, requires more complex underwriting for deeper analysis. Risk factors are calculated differently, mostly based on how likely your business will be in generating chargebacks that cannot be managed properly.
Maintaining the best possible security requires more involvement from a payment platform when fraud management needs are elevated and overall risk increases. This is linked to having a skilled team on standby to monitor all online footsteps and transactions of high-risk merchants. This is why it is vital to deal with a reputable and reliable provider with extensive experience and knowledge in this unique market.
High-Risk Online Merchant Account UK Fees and Pricing
Different providers offer different fees and pricing, which is why you’re advised to shop around and select the one that best fits your business and budget. However, most providers offer fees and pricing ranging from:
- Rates from 4.9% +0.35 Euro per transaction
- Minimum registration fee of 500 Euros (Depending on high-risk business type)
- Rolling reserves of between 5 and 10% withheld for a six month period or more
What Industries are Considered High Risk?
High risk doesn’t necessarily imply unprofitability, it means that the financial institution feels that there is a high chance of fraud, refunds, and chargebacks. The following list is not exhaustive but includes most of the industries that are in the high-risk category:
- Jewelry, watches & related accessories
- Smartphones, including the original sale, resale & spare parts
- Car parts
- Game codes & hacks
- Phone locking services
- Massage parlors & Tattoo studios
- Nightclubs / Cabaret bars
- Alcohol products, beverages & Off-licenses
- Investment schemes
- Health supplements & Wellness Products
- Digital downloads
- Web hosting and ISP services
- Technical Support & Web Development
- Software and other downloads
- Credit Repair
- Money Transfer
- Gambling and Casinos (both on and off-line)
- Travel, booking, and tickets
- Adult content, products, and services
- E-cigarettes and Vaping
- Drugs and related accessories/paraphernalia
- Payday loans
What if I work In a Non-Risky Industry but Have Bad Credit?
There’s good news if you’re looking for a high-risk online merchant account because your business or the owner has bad credit. While you may have to pay higher fees initially, you can continuously build a solid track record to show the payment provider you mean business. Paying your bills on time and mitigating your chargebacks will eventually improve your credit score and you’ll no longer be deemed high-risk over time.
Comparing High-Risk Online Merchant Account UK Providers
You’ll be faced with an array of options when looking to find a high-risk online merchant account. So, how will you know which one to pick? Below are some of the factors that you should keep in mind:
Do They Work With Similar Business Types in Your Industry?
Ceteris paribus, it’s imperative and advisable to work with a provider working with other merchants in your industry. They’ll understand what the typical transactions look like and have a higher chance of detecting fraud.
What is their Total Fee Structure?
This is a crucial factor to consider as some high-risk merchant account providers might offer lower monthly fees but charge ridiculously high discount rates. On the other hand, some providers might offer low transaction fees while charging a high monthly fee. The solution is to have a rough idea or estimate of your entire transaction volume and relate based on that. Work with a provider who is willing to fully disclose their fee structure.
Do They Have a Customer Service Line You Can Call?
The unfortunate drawback with operating in a high-risk industry is that problematic payment issues come up frequently. It is, therefore, imperative to know that you can always pick up the phone and consult a representative or expert immediately. Customer support is very important.
For a High-Risk Online Merchant Account UK, Look for a Payment Provider Who Offers These Services:
- Reliable Payment Gateway and Virtual Terminal
- Point of Sale Options for Your Retail Business
- Risk Management
- Safe Infrastructure
- Secure Transaction and Processing Facility with SSL
- Simple API integration for major platforms
- SSL and 3D Processing
- Easy Account Set up
- Minimal to NO Early Termination Fee
- ACH Payment Processing
- Fraud Protection and Scam Control Against Online Theft and Fraud
- Multiple Currency Processing
- Online Reporting for Transactions
- Online Shopping Cart Facility
- Real-Time Processing
- 24/7 Technical Support
- Acceptance of all major Credit and Debit Cards like MasterCard, Visa, etc
- Automated Recurring Billing Options
- Cost-Effective Solutions
The Importance of Getting a High-Risk Online Merchant Account UK
Let’s face it! More and more customers are becoming less interested in the use of cash and checks in businesses. Debit card payments, online transactions, and credit card payments are mainstream these days. The rise of Bitcoin and various alternate coins are becoming more popular.
This is why you should get a high-risk merchant account, which will accept payments in cryptocurrencies, credit cards, or debit cards. This will open more doors to your business and even add to its value.
With major credit card companies massively investing in their businesses, more customers are using payment cards for their transactions. Your company must serve these demands of cashless customers with an online merchant account.
It’s essential that you work with a reliable and reputable payment service provider to access the numerous benefits that come along with doing so. A solid payment provider will normally offer integrated solutions so your business can accept different payment methods and currencies. They should also offer robust fraud prevention features that will help ensure your business is not exposed to excessive chargebacks, refunds, or fraud
Myths About a High-Risk Account
Virtually all businesses accept credit card payments for their items and services in a nearly modern cashless society. Even startups and small businesses can leverage the many benefits that come with using a high-risk merchant account payment gateway to streamline their operations and customer experience. Below are some misconceptions that you should keep in mind before dismissing high-risk merchant accounts.
High-Risk Merchant Accounts Are Too Complicated and Tricky to Obtain
A few years back, it was tedious for small businesses to provide the required documentation to qualify for a reputable merchant account. This saw many small businesses hesitate to put in the effort and time for fear of being dismissed. Now, high-risk online merchant accounts in the UK are easier to get than ever. With a simple online application and easily accessible information, your business can apply and get approved within a few business days should all go well.
High-Risk Merchant Accounts are Too Expensive
With numerous small businesses relying on online payment gateways and merchant providers to assist their businesses, there are many options. The increased competition has resulted in reduced fees and overall costs while providing many alternate options to accept payments.
However, you must always be careful with the provider you select. While competition has leveled the playing field, there are scrupulous providers taking advantage of the market. Always look for high percentage rates, large upfront reserve requirements, unfair termination policies, and other hidden charges.
Merchant Providers are Only Concerned with Big Companies
Your small business might not be as huge as some of the big names out there. However, that doesn’t necessarily mean that you make insignificant money. Don’t shy away from employing a high-risk merchant account provider in your business processes.
Most of the new merchant accounts are being opened by small businesses and providers have realized this. This has seen many providers come up with an array of options for the unique needs of your small business.
Merchant Accounts are Unnecessary When you Have a Payment Gateway
Both payment gateways and merchant accounts play a crucial role in your business, but they’re not the same thing. The two services provide entirely different functions and having only one may not fully optimize your business success.
First, understand how each service works. A payment gateway assists in facilitating the authorization and settlement of the transactions. Payment gateways provide your customers with an efficient and reliable way to pay for goods or services online or over the phone.
A merchant account is like a bank account where the payments will be held until they’re deposited into the company’s bank account. Due to security protocols, funds cannot be directly transferred from one bank account to another.
Call the professionals at SecureGlobalPay to help answer any questions you may have or simply complete our online application below. Once received, we’ll get personally get back to you on how best to move forward.